Central Valley Mayors Oppose Tax Plan for High-Speed Rail

Mayors from California’s Central Valley are unhappy with a proposal to direct local tax revenues and zoning funds into the state’s long-overdue high-speed rail project. They have even threatened legal action against the state if this plan is implemented.

Fresno’s Mayor Jerry Dyer, along with other leaders from the region, criticized High Speed Rail Authority CEO Ian Chaudhry in a sharply worded letter. They argue that the plan to “capture” local property and sales tax increases near future rail stations is “unconstitutional.”

In their letter, dated April 23, they described the initiative as a “legally questionable scheme” that would misappropriate county tax revenues, warning that it could set a troubling precedent across the state.

Railroad officials have stated they don’t intend to increase taxes. Instead, they aim to collect a share of the anticipated rise in property and sales taxes around the new rail stations. The state is also looking to assume zoning authority in those regions. Reports indicated that these tax and zoning strategies were part of a new business plan draft for 2026, which was delayed after the fiscal watchdog raised legal concerns, highlighting flaws in the proposal.

This idea hasn’t gone over well with Central Valley’s mayors, who include Matthew Serratto from Merced, Karen Goh from Bakersfield, Mark Kailis from Hanford, and Christina Fugazi from Stockton. They believe the burden of this troubled megaproject should rest with the state, not local taxpayers.

A letter from the California Association of Counties and other representatives supported the mayors’ stance. They described the tax plan as inconsistent with various provisions of the California Constitution, emphasizing that local sales tax revenues are explicitly reserved for local government uses and prohibited from being reallocated.

The High Speed Rail Authority has not yet commented on the situation.

A recent state analyst report highlighted “several issues” in the draft business plan for high-speed rail. Without necessary adjustments, costs could skyrocket to $231 billion, citing eight significant structural concerns raised by analysts. These issues included unclear funding assumptions and reliance on future policy changes.

“In our view, the approach in the draft plan lacks transparency,” Legislative Analysis Service auditor Helen Kerstin told lawmakers during an April 28 hearing.

So far, the long-delayed project has incurred costs of around $14 billion, primarily for land acquisition and construction efforts in the Central Valley. Earlier this year, Governor Gavin Newsom praised the commencement of track-laying work, but critics have likened the infrastructure to a contemporary “Stonehenge.”